Theresa May defends National Insurance hike for self-employed ‘to make system fairer’

Theresa May Brexit speech

The Prime Minister said the changes outlined in Wednesday’s budget would close the gap between employees and self-employed workers.

The Government faced an immediate backlash after Chancellor Philip Hammond announced the planned rises to National Insurance contributions (NICs), which are expected to hit almost 2.5 million people.

Mrs May’s own MPs have voiced their concerns and Labour accused the Government of breaking a Conservative party manifesto pledge from 2015 in which the Tories promised not to raise NICs.

But ministers – including the Prime Minister and the Chancellor – have stressed that the legislation for that manifesto promise only extended to employees NICs.

At a press conference in Brussels, Mrs May said: “This is a change that leaves lower-paid self-employed workers better off, it’s accompanied by more rights and protections for self-employed workers and it reforms the system of National Insurance to make it simpler, to make if fairer and to make it more progressive.”

The Prime Minister said the changes to National Insurance would not be in the Finance Bill, but contained in separate legislation.

“What we will do this summer is publish a paper which will explain the full effects of the changes,” she said.

That will contain details about the reforms to National Insurance Contributions (NICs) “along with some changes we plan to make on rights and protections for self-employed workers, including on issues like pension rights and parental rights and maternity pay”.

She added: “The Chancellor will be speaking, as will his ministers, to MPs, business people and others to listen to the concerns.”

Mrs May said the “difficult decisions” in the Budget had allowed the Government to fund a new approach to technical education, open more than 100 new free schools and invest in social care, while investing in the long-term productivity of the economy and maintaining a commitment to balance the country’s books.

The PM was speaking at a press conference at the European Council summit in Brussels, believed to be her last before she triggers Article 50 to start the process of exiting the European Union.

Mrs May signalled that she would fight against any EU demands for a Brexit “divorce bill” which could potentially run to tens of billions of pounds.

Mrs May indicated that Britain will argue against any suggestion that it must agree a divorce settlement before negotiations on a new trade deal can begin.